Italy’s Conte Sets Warning to Populists on Talks With Brussels
(Bloomberg) -- Prime Minister Giuseppe Conte has a message for the quarrelsome populists who’ve run Italy’s coalition government over the last year: keep quiet, and let me do the talking.
The government will be finished if Italy can’t make a budget compromise with the European Union, Conte told Corriere della Sera. Without a deal, “we all risk to go home. For sure I would go,” the premier said. The increasingly assertive premier was the focus of Italian media reports on Monday.
The prime minister is set to meet with his deputies face to face for the first time since Brussels warned the country on possible disciplinary measures over its debt and Conte is portraying himself -- along with Finance Minister Giovanni Tria -- as the reasonable negotiator.
Another item that will be high on the agenda: the proposed small-denomination government bonds known as “mini-bills” or “mini-BOTs” that some investors fear would the first step toward a parallel currency -- and an exit from the euro.
Conte and Tria have rejected the idea, saying there are other ways to speed up payment of arrears to the state’s suppliers; Five Star and particularly the League have continued to push for them.
While Italy has begun talking with the European Commission, the position of the two deputy premiers in the coalition -- Luigi Di Maio of the Five Star Movement and Matteo Salvini of the League -- remains a risk factor.
Costly campaign promises from the coalition partners, combined with pledges to cut taxes, raised red flags with Brussels in the first place, and neither party has backed down yet.
Conte in the Corriere interview sought to seize the initiative, positioning himself as the grownup in the room who understands what’s at stake in talks with the EU.
“Be careful taking on the European Commission on the infraction procedure,” Conte said in the interview. If a procedure is opened it would “compromise our economic sovereignty,” and the result could “put the savings of Italians at risk,” the prime minister said.
League leader Salvini has continued to strike a defiant pose toward the EU, insisting that his party’s recent gains in European parliament elections give him a mandate to pursue pet projects like pension reforms and a flat tax -- policies that have raised concerns in Brussels.
If Salvini wants to “capitalize” on the European vote result, there’s no alternative for him other than seeking new national elections, Conte said in the interview, noting that in the interim, the May 26 election did nothing to change the composition of the current parliament.
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